Have you ever had a leak in your pipes and wondered if you could fix the problem yourself or should call a plumber? Or maybe your car is acting up and you’re not sure if a mechanic is needed. Sometimes, it’s better to leave the do-it-yourself (DIY) mindset behind and call a professional.
When you’re setting financial goals and planning for the future, it’s easy to fall in the trap of taking one-size-fit-all advice. In bookstores, shelves are lined with DIY financial planning books. Countless financial planning advice blogs offer one-size-fits-all guides to taking control of your finances.
While doing it yourself may seem like the easy route to financial stability, numerous pitfalls could come with taking standard financial advice.
The Problem With Standard Financial Advice
DIY money management can be a problem, regardless of how simple you perceive your financial circumstances to be. A book offering standard financial advice may answer questions like “should you save?” and “do you need to participate in a 401(k) plan?” But your personal financial standing is likely more complex than that. You’re probably facing questions like how much you should save and how much you should contribute to your 401(k) plan.
To fully grasp your financial standing, it’s important to understand a few numbers: the inflow of your income, the outflow of your expenses and your net worth, including all of your assets and your total debt. This information is complex to keep up with and may change frequently. When you’re managing these complex numbers alone, applying blanket advice like “put 10% of your paycheck into savings” may not be the best advice for you.
Every person’s financial picture features unique challenges and goals, and trying to manage these exclusivities on your own may put your financial future at risk.
The Benefit Of Leaving DIY Financial Planning Behind
Professional financial advisors offer the following benefits:
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Expertise: Unless you’re an accountant, it’s often wise to have a professional file your taxes. Likewise, financial advisors have the experience, connections and impartiality to offer financial advice that’s tailored to your needs and goals.
Unless you know the ins and outs of 401(k), IRAs, estate taxes, retirement planning and more, you may not be suited for complex money management. In addition to navigating these complexities, a good advisor dedicates time to monitor your finances. Most people don’t have time to keep track of ever-changing financial laws and regulations.
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Feedback: Impartial advice is one of the greatest services a good financial advisor offers. That’s why many CEOs have a board of advisors to offer guidance and aid with major decisions. When you want to strengthen your financial standing, building a team of advisors gives you an advantage. For example, it’s easy to get carried away with DIY investing and take out a 401(k) loan for an impulsive buy, like a new car or a vacation. When you have guides to help with your finances, there’s a voice of reason at your disposal to analyze decisions and help you make the best choices. Instead of seeking financial advice from a book or a friend, use a well-rounded team of advisors to assist you in meeting your financial goals.
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Implementation: While having access to financial expertise and feedback is important, proper implementation and execution is the true key to success. Setting up accounts, making transfers, scheduling exchanges and proper titling of accounts are all critical aspects of maintaining and implementing your financial strategy. Most people don’t have the time to review account disclosures and ensure everything is accounted for. Financial advisors and their support teams help make sure these important tasks are done. As a result, it’s easier for you to carry out your financial plans.
Whether you’re setting financial goals or planning for retirement, working with an experienced team of financial advisors saves you time and energy, plus you avoid the risks associated with DIY financial planning.
Are you ready to leave one-size-fits-all money management behind? Schedule a free consultation with a Richard Brothers financial professional to talk about your financial future.
